FINANCIAL LITERACY

Pre-school, Pre-K, Kindergarten, First and Second Grade

Making Spending Decisions:  From birth, a child has choices. At first parents make the decisions, but before the end of the first year, children are capable of making some simple selections. If children are allowed to make easy choices as toddlers, then making decisions for themselves as they grow becomes less difficult. This is a great time to introduce money-related, decision-making activities for children in preschool and kindergarten.

Spending Plans:  Preschool-aged children are capable of learning simple spending plans. Early training in categorizing money establishes patterns for future money-management behavior.  Introduce children to the concept of dividing their money into categories, namely “save,” “spend,” and “share.” Present activities that will help children understand that money is limited in quantity and must be divided for different purposes.

Earning Money:  Adults must earn money to provide for their needs and wants. Children learn that money is earned and does not come free. Children also learn that money is limited in quantity.  Early training in earning small amounts of money provides a foundation and understanding that work and money are connected.

Young children perform certain tasks at home just because they are part of the family or household. Children can do additional tasks to earn money for their spending plans. Children need to distinguish between shared responsibilities as members of a family and responsibilities that earn them money.  Introduce young children to activities and ideas for earning money. The money earned helps children meet their financial goals. Remember that the financial goals for a preschool-aged child may seem simple to an adult, but they are not simple to the child. Children learn the concept that money is a reward for working.

What is Money?:  Money is the medium of exchange for most goods and services. Different coins and paper money have different values.  Children need the ability to recognize the names and values of different coins and bills used in exchange for goods and services. This lesson helps children identify the names of coins and grasp their relative values in terms of purchasing power. Present games and activities that will help children acquire this knowledge.

Grades 3-6

Allowances and Spending Plans:  Children in grades three through six are capable of managing small amounts of money. They can divide their money into several categories, including “spend,” “save,” and “give.” At the same time, they can spend their money and keep a record of what was spent.  Provide an introduction to allowances for third through sixth graders. Allowances are the first step to understanding written spending plans or budgets. With guidance managing allowances in childhood, children can become financially responsible adults. Adults with effective budget skills create healthier family relationships and contribute to building a stronger economy.

Money Responsibility:  Successful money management includes keeping records of money spent. This includes having the skills to know how much money is available, how much money has been spent, and how much money must be saved for future needs.  Introducs elementary-aged children to the concept of being responsible for managing money through accurate record-keeping. It provides them with activities and worksheets that demonstrate the need to be accountable for how they spend and save money.

Saving and Investing:  Part of learning about money management includes knowing where to put savings. The value of savings increases differently depending on how the money is managed. Placing savings in something beyond a savings account introduces students to the world of investments.  When they become adults, these students will have control over where they invest their money for retirement. It is important that they understand how to get the best growth for their money. At the same time, they need to understand the chances of losing that money in investments.  Introduce students to the basics of how money grows through saving and investing. It introduces the concepts of financial risk and rates of return.

Comparison Shopping:  Introduce students to the concepts associated with comparison shopping and choosing the best option. Introduce students to the difference between needs versus wants. Students will also learn to scrutinize advertising to discover messages that may affect their decisions.